South Africa’s finance minister reaffirmed his commitment to fiscal consolidation in today’s Medium Term Budget Policy Statement (MTBPS) but, even so, debt is now projected to peak at a much higher level than previously envisaged. A potential new fiscal rule and greater emphasis on growth-enhancing reforms are aimed to reassure investors but also suggest that officials are looking at alternatives to tackle the debt problem. This is likely to lead down the path of financial repression policies.
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